Breaking: USD/JPY Breaks Through 1 Year Highs
USD/JPY just broke through 1-year highs earlier than expected.
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Abstract:The pair is facing selling pressure for the second consecutive session, trading around the mid-210.00s. While the broader trend favors the Yen initially due to profit-taking, the pair remains within striking distance of its multi-year highs (highest since 2008). The correction appears technical rather than fundamental at this stage.

Snapshot of key technical moves in secondary pairs:
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USD/JPY just broke through 1-year highs earlier than expected.

Currency markets opened the week with diverging narratives as the Japanese Yen (JPY) found footing on policy signals, while the Euro (EUR) struggles to price in the efficacy of German fiscal maneuvering amidst looming trade war threats.

The Bank of Japan (BOJ) has signaled a decisive shift away from its ultra-loose monetary past, with December meeting minutes revealing a policy board far more hawkish than market consensus anticipated. This development sets the stage for a high-stakes clash between monetary tightening and the government's massive fiscal expansion.

Despite the Bank of Japan’s (BOJ) attempts to normalize policy, the Japanese Yen faces a grim trajectory, with major institutions including JPMorgan and BNP Paribas forecasting a slide to 160 or lower against the Dollar by late 2026. The consensus is shifting from cyclical weakness to a narrative of "structural decline."